Strategies for reducing social inflation

Takeaways:

·       4 strategies to defeat nuclear verdicts

·       Plaintiff attorneys are changing tactics

·       Technology's role in identifying a claim's legal potential

Social inflation is one of the risks creating major headaches for insurers across the country, and the rise in nuclear verdicts, both in the frequency and size of jury awards, shows no sign of dissipating.

In the latest Leaders webcast, legal experts Robert Tyson and Cayce Lynch of Tyson & Mendes, shared some insights based on their research of 100 cases involving nuclear verdicts.

Breaking the pattern

Interestingly, they found that nuclear verdicts fit a pattern, and the best way to counteract them is to change the pattern. Over the years, plaintiff attorneys have changed their strategies, and they are working. Their tactics used to involve making jurors feel sympathy for the plaintiff, but their latest strategy focuses on creating anger against the insurance carrier and asking for significant awards to ensure that the defendant "pays" for whatever wrongdoing occurred. While some attorneys and insurance professionals think that jurors are crazy, Tyson says the reality is that they've been manipulated by plaintiff attorneys for years.

"We have the data," Tyson explains. "The good news is there are things you can do. The only thing is, you have to do something that the industry loathes. It's change. You have to change the way you do things because what's happening is they're chalking it down to [the fact] that jurors are crazy…The best defense lawyers in America are getting killed. The data shows that the best insurance claims professionals, the most experienced, are getting killed because the game has changed. You're doing everything the way you always did, and plaintiff's lawyers freaking love it. They love it!"

Lynch concurs that changing defense strategies is key to shifting the outcomes of these cases. She also shared that their research confirmed four strategies that can help diffuse juror anger. "We call them the core four. First, we must personalize our defendant. We must make our defendant human. Our jury needs to connect with who the defendant is. We cannot be just a faceless corporation that is seen as having deep pockets…The second is that we must accept responsibility for something in every single case. Now, I did not say liability. We accept responsibility in every case at Tyson & Mendes, and we get defense verdicts all the time. The third thing defense teams must do is sponsor a defense number…Finally, we argue pain and suffering in every single case. So this is the biggest component of most nuclear verdicts. The plaintiff's bar has the most creative strategies and arguments around why $50 million is fair and reasonable, and it convinces our everyday neighbors that $50 million is fair and reasonable. And in response to that, they're hearing silence from the defense."

Technology is also playing a role in how insurers identify claims that have the potential to become nuclear verdicts. Artificial intelligence can help them synthesize data to identify factors that occur in claims resulting in litigation more frequently, as well as hotbed practice areas and jurisdictions across the country. As seemingly minor claims become nuclear verdicts, identifying the similarities before the cases escalate it vital.

To learn more about how insurance carriers can proactively defend against nuclear verdicts and reduce social inflation, see the full Leaders webcast here. And for readers who prefer listening to podcasts, catch the interview on the DigIn Podcast channel.